A federal judge has ruled against the fired president of an Ohio thrift who sought reinstatement in a "whistleblower" suit.
U.S. District Court Judge James L. Graham declined last week to put Michael H. Anderson back in his old job at Jefferson Savings Bank in West Jefferson.
The thrift said it fired him because he had backed out of a severance agreement and had violated federal lending laws.
Judge Graham made his ruling while a 10-member jury was deliberating after five days of trial in the case. The jury ultimately concluded that Mr. Anderson was not improperly terminated from his job and should not be awarded damages.
"We have maintained for years that the reason this man was terminated was that his conduct was unethical," said Robert M. Kincaid Jr., an attorney with Baker & Hostetler who represented the $66 million-asset thrift.
In an interview, Mr. Anderson denied wrongdoing and said chances are good he will appeal.
He maintains that he was terminated from his job because he informed regulators about improprieties involving the thrift's former chairman and about a check-kiting scheme.
Mr. Anderson, Jefferson's president and chief executive from October 1989 through February 1993, said he has not found another job in the industry and still would want to be reinstated should the ruling be overturned on appeal.
"I have no qualms at all with the shareholders" at Jefferson, he said. "I have no qualms with any of the officers, except Mr. (James) Campbell, the current president."
Mr. Anderson sought reinstatement at Jefferson, as well as damages and other fees, in his 1993 civil suit under the "whistleblower statute" of the Federal Deposit Insurance Act. This provision prohibits discrimination against or termination of employees who allege violations of law or regulation to regulators.
Attorneys involved in the case believe it may be the first whistleblower case in the nation to go to trial under the relatively new statute.
In the suit, filed in U.S. District Court in Columbus, Mr. Anderson alleged that he was terminated because he gave federal banking officials information on violations at Jefferson, including information about three $100,000 loans Jefferson made that were used by recipients to buy stock in a company controlled Ronald E. Scherer, then the thrift's chairman.
Mr. Anderson turned over information about a transaction that allegedly allowed Mr. Scherer to use land to acquire a majority stake in Jefferson, according to the lawsuit.
Mr. Anderson also told the examiners of what he said was a check kiting scheme involving a Jefferson director.
The Office of Thrift Supervision forced Mr. Scherer to resign from Jefferson's board in July 1993.
Jefferson said Mr. Anderson was terminated because he backed out of a severance agreement and violated federal law by having the thrift make an unsecured loan of $45,000 to a third party for investment in real estate in which Mr. Anderson had a 50% interest, according to the final pretrial order.
The thrift also alleged that Mr. Anderson engaged in irregular and improper banking procedures in loan refinancing with the Federal Home Loan Mortgage Corp. that resulted in a $22,000 fine and a four-month suspension of the thrift's trading privileges, according to the pretrial order.
